Protectionism and the Philippine Economy

By: Ser Percival K. Pena-Reyes, M.A. and Justin Jerome G. Valle

On February 9 the Philippine Institute for Development Studies (PIDS) hosted a seminar, entitled “Global Uncertainty: Regional Headwinds and the Philippine Economic Promise” given by Dr. Dan Steinbock, who noted that, with global economic integration at a standstill, the world economy is coping with diminished growth prospects.

Under the Trump administration, the United States is set to introduce new protectionism heralded by expected rate hikes by its Federal Reserve. Europe is dealing with euro-skeptical surge, while Japan is managing its own monetary gamble. China is rebalancing amid growth deceleration, while Russia is reeling from sanctions. Brazil is handling a soft coup, while India is facing slowing reforms. A key theme emerging out of all these recent global developments is protectionism, which refers to government actions and policies that restrict international trade, with the intent of protecting local businesses and jobs from foreign competition.

Over the last two weeks, our colleagues have written about the relative strength of the economy, as well as future challenges that globalization will continue to bring. So, perhaps, it might be useful to discuss why protectionism is invoked and how it is likely to affect the Philippine economy.